The mcfw demo is just a cmd line demo . It may not be very useful to go thru it apart from understanind go to get encoded bitstream and send bitstream for decoding.
To understand the usecase you can go thru DM816x_DVR_RDK_UseCaseGuide_16D1_DVR document under usecase folder.
Also you can go thru DVR_RDK_McFW_Link_API_Training to understand basics and difference between usecase and application.
You are right you will have to develop your own dvrapp and nvrapp .
For debugging you can use either gdb or prints whichever you find more easy.